# Petition for Writ of Certiorari — Ellington v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1985
- **Citation:** 474 U.S. 1034

## Text

Supreme Court U.S
FY ae I)
NOV 19 1985

YOSEP}' SPAN;

“ Oo
Cie RK 4 JR.

IN THE SUPREME COURT OF THE UNITED STATES ———

OCTOBER TERM, 1986

CHARLES ELLINGTON,
Petitioner,
vs.
UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI
To the United States Court of Appeals
For The Sixth Circuit

JAMES R. WILLIS, ESQ.
Attorney for Petitioner
Suite 610,Bond Court Bldg.
1300 East Ninth Street
Cleveland, Ohio 44114
(216) 523-1100

ANN MARIE TRACEY
Assistant U.S. Attorney
U.S. Post Office and
Courthouse Bldg.
Cincinnati, Ohio 45202

QUESTIONS PRESENTED

I
Whether evidence is insufficient to
support a conviction for mail or wire
fraud when it fails to establish both the
existence of a scheme to defraud and the
use of the mail or a "“wire" for the

purpose of executing such scheme.

Il

Whether the intent to defraud
instruction in this mail and wire fraud
prosecution was constitutionally
insufficient to properly place before the

jury the good faith defense raised by the

accused,

ty D> ac ms — ie
- ae iy
: a :

III

Whether in a mail and wire fraud
prosecution the given instruction must
make it clear that the existence of a
scheme to defraud must be established
apart from any false or § fraudulent

representations,

ii

TABLE OF CONTENTS

PAGE
QUESTIONS PRESENTED . : ‘ 1
TABLE OF AUTHORITIES , ‘ — |
OPINIONS OF THE COURTS BELOW . poe
JURISDICTIONAL STATEMENT . ‘ eee
STATUTORY PROVISIONS WHICH THE CASE
INVOLVES . ; ‘ : pace
STATEMENT OF THE CASE ‘ , fae
REASONS FOR GRANTING THE WRIT . ae

ARGUMENT NO, I:
Evidence is insufficient
to support a conviction
for mail or wire fraud
when it fails to

establish both the

iii

as

Ss

existence of a scheme to
defraud and the use of
the mail or a “wire” for
the purpose of executing

such scheme. . °

ARGUMENT NO. II:
The intent to defraud

instructions in this mail

and wire fraud
prosecution was
constitutionally

insufficient to properlv
place before the jury the
good faith defense raised

by the accused. .

ARGUMENT NO, III:
An instruction in a mail
and wire fraud

prosecution that fails to

iv

15

make it clear that the
existence of a scheme to
defraud apart from any
false or fraudulent

representations is

constitutionally flawed. . . 23
CONCLUSION . . ° . . 28
CERTIFICATE OF SERVICE . . . 30
APPENDIX:

Appendix "A" - Opinion of

the Court of
Appeals (Sixth
Circuit) . Al

Appendix “B" - Relevant
statutory
provisions. Al0

|

TABLE OF AUTHORITIES

PAGES
Blachly v. United States, 380 F.2d
S65, G71 (StH Cif. 1967) . ae
Coleman v. United States, 167 F.2d
837 (5th Cir. 1948) . , -> ae
Durland v. United States, 161 U.S.
306 (1896) . . . 7 ae

Epstein v. United States, 174 F.2d 754,
766 (6th Cir. 1949) . ° .

Harrison v. United €tates, 200 F.2d
662 (6th Cir. 1912) . . < ome

Hawley v. United States, 133 F.2d 966
(10th Cir. 1946) , : » a8

Horman v. United States, 116 F.2d 350
(6th Cir. 1902) . ‘ “ee x

Hurson, Limiting The Federal Mail
Statutes - A Legislative Approach,
20 Am. Crim. L. Rev. 423 (1983) 25

Scott v. United States, 263 F.2d 298,

402 (5th Cir. 1959) . . ae
Silverman v. United States, 213 F.2d
145 (5th Cir. 1954) . ‘ oa
vi

PAGES
Steiger v. United States, 373 F.2d
133 (10th Cir. 1967) ; ie
Strauss v. United States, 376 F.2d
416, 419 (5th Cir. 1967) . 93
United States v. Benjamin, 328 F.2d
854 (1964) : ° . ; 2&0

United States v. Blane, 375 F.2d 249,
252 (6th Cir. 1967) . . bk eo

United States v. Bronston, 653 F.2d
334 (8th Cir. 1981) . ; » 20

United States v. Condolon, 600 F.2d 7
(4th Cir. 1979) ; ‘ > 20

United States v. Elliot, 571 F.2d 880,
898 (5th Cir. 1978) . : oe

United States v. George, 477 F.2d 508
(7th Cir. 1973) : . aS

United States v. Goss, 650 F.2d 1336,
1341 (1981) . ° . » 6,9

United States v. Lemire, 720 F.2d
Soa? <<. CEE. 1983) ; ... 23

vii

.
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iy ri | ile aha Ne ae t jae ay re " 4 ncinadinale? sal
4 , ai rom: hh ites va =
7 ll nahi er ks He, ee? i; 7 wens ve

iin

PAGES

United States v. Phillips, 217 F.2d
435, 440 (7th Cir. 1954) . ae

United States v. Regent Office Supply,
421 F.2d 1174, 1180
(2d Cir. 1970) . ‘ ° 9,27

United States v. Reid, 533 F.2d 1255,
1264 (D.C. Cir. 1976) . —

United States v. Sherer, 653 F.2d 334
(8th Cir. 1981) ‘ : ~~ ae

Weiss v. United States, 122 F.2d 675,
at 681 (5th Cir. 1941) ‘ . 24

STATUTORY PROVISIONS

18 U.S.C. §1341 . . : . 2
18 U.S.C. §1343 . . . . 2
viii

NO.

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1986

CHARLES ELLINGTON,
Petitioner,
vs.
UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI
To The United States Court of Appeals
For The Sixth Circuit

To The Honorable, The Chief Justice And
Associate Justices Of The Supreme Court
Of The United States:

The Petitioner, Charles Ellington,
respectfully prays that a Writ of
Certiorari issue to review the judgment
of the United States Court of Appeals for
the Sixth Circuit, which judgment became

final on September 3, 1985.

OPINION BELOW

The Opinion of the Court of Appeals
(Appendix "A",-. infra, pp. Al1-A9) is
unreported.

JURISDICTION

The judament of the Court of Appeals
was entered on September 3, 1985. The
jurisdiction of this Court is’ invoked
under 28 U.S.C. 1254 (1).

STATUTORY PROVISIONS WHICH THE CASE

INVOLVES

The relevant statutory provisions
involved are 18 U.S.C., §1341 and 18
U.S.C., §1343. (Text set forth in
Appendix.)

STATEMENT OF THE CASE 2/

(I)
Following a jury trial in the

Southern District of Chio (presided over

17 References made to a page in the
transcript of proceedings in the trial
court will be designated (Tr. __).

iia diate

by Judge Rice) Charles Ellington was

es S

convicted and sentenced for various
| violations of the Mail Fraud Statutes, 18
/u.8.¢. §1341 and a violation of the Wire
Fraud Statute, 18 U.S.C. §1343.

On appeal from the verdicts and the
| judguent entered thereon, the Sixth
Circuit discounted and rejected
petitioner's contention that the trial
court erred when he not only failed to
give a separate and specific good faith

instruction, but refused to do so,

In a nutshell Charles Ellington, the

petitioner herein (variously referred to
as either the petitioner, the defendant
or Ellington), was charged and convicted
of violating the law by using the mails
and a wire communication to “deceive
others and to obtain by false _ and
fraudulent pretenses and representations

or promises, a substantive benefit ...

3

titel

“he
Aves
ge
i

6 “Tb jalan .

from the party so deceived" (Tr. 930).
The mail fraud counts, numbers 1-10, 12,
13 and 15, specifically charged Ellington
with having devised "a scheme = and
artifice to defraud" the various
individuals named in such counts of

certain monies. (Id., 931.) Count 11

made a similar wire fraud charge (id.,

938).

The facts were said by the
Government to be that the petitioner
operated a mortgage brokerage business

known as Unlimited Financing Inc. And,

it was said that he had _e falsely

represented to certain named individuals

that he had successfully obtained
“funding for other clients, and that upon
payment of a fee ... funding for their
projects would be forthcoming; ... [or]
that all or part of the fees paid would

be refunded should the loan not be

obtained" (id., 932). The Government

also contended that as a part of the
alleged scheme and artifice, which was
designed to defraud, resort was had to

the mail service (id., 933) and in one

instance (count 11) to a wire

communication facility (id., 938).

In defending the charges made above,

-counsel for the defense sought to show

that Ellington had not defrauded anyone

out of anything. Rather he had merely
failed to obtain various requested
unconventional loans. And, that while
Ellington was paid (in some instances)
for his efforts, he did not engage in the
criminal conduct charged in the
indictment.
II
On appeal the Court conceded that

the trial judge disallowed the request

made for a separate and specific

DE I AI RD oth.

instruction on the good faith issue

"because he believed the defense related

directly to the element of intent and

that the instruction that the government

must prove intent beyond a _ reasonable

doubt was adequate to meet defendant's

concerns" (Appendix "A", p. A5). Indeed

the Sixth Circuit credited itself with

having rejected the theorv exposed in

-United States v. Goss, 650 F.2d 1336,

1345 (1981) by the Fifth Circuit on this
issue.

Also, the Sixth Circuit further
conceded the given “instructions did not
~e. expressly inform the jury of the
defendant's theory" (ibid). The Court
then added that while the trial court
should have given the instruction, the
failure to do so was harmless error.

(Id., at Ao.)

REASONS FOR GRANTING THE WRIT

In this case the Government has
sought to criminalize conduct undertaken
in good faith by a business man. The
evidence that a "scheme" furthered by the
use of the mails and wire, was clearly
insufficient to support a finding of
guilty beyond a reasonable doubt on any
of the counts.

Indeed, the proof here shows this
petitioner at all times acted in "good
faith".

Ir

On the "good faith" defense issue,
it is specifically argued that the trial
judge improperly remitted the accused to
arguing a defense the Court viewed as
applicable without the benefit of an
instruction defining such defense for the
jury. This violated fundamental due

process.

Ii!

The Court's failure to make it clear
‘in its instructions that the "scheme"
‘referred to in the indictment was indeed
van entity of sorts and required proof
“that it existed apart from the alleged
i false and fraudulent representation
| supposedly made for the charged purposes

likewise violated due process.

ARGUMENT NO, I

Evidence Is_ Insufficient To

Support A Conviction For Mail

Or Wire Fraud When It Fails To

Establish Both The Existence

Of A Scheme To Defraud And The

Use Of The Mail Or A “Wire"

For The Purpose Of Executing

Such Scheme,

At the outset there can hardly be any

dispute that the crimes charged herein on

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the basis of 18 U.S.C. §1341 and §1343,

require for a conviction that the accused

so: i Meine, balla: dele Capt Mtg

© ag desig gg

must have acted as he did on the basis of
a specific intent to defraud, United

States v. Goss, 650 F.2d 1336, 1341 (5th

Cir. 1981). Also see, United States v.

Regent Office Supply, 421 F.2d 1174, 1180

(2d Cir. 1970).

It is here being contended that the
evidence in the first instance fails to
show the presence of any scheme to
defraud. This follows because in our
view, and hopefully in the Court's,
advertising for clients and offering

one's services to them as a financial

broker does not translate into a scheme

to defraud absent proof of an intent to

cause harm. So postured, any argument

that the efforts rendered by this
petitioner were “reasonably calculated to

deceive persons of ordinary prudence and

omprehension," Silverman Vv. United

tates, 213 F.2d 145 (Sth Cir. 1954),
Ysimply fails to survive any meaningful
scrutiny.

In making this contention we, of
course, credit the fact that none of the
people involved with Ellington were
inexperienced businessmen. Indeed they

were all shrewd businessmen who

apparently believed, as did the accused,
that he was performing a _ legitimate
service and that he could and did assist
them in getting the loans they sought.
This point becomes even more cogent when
it is realized that one cannot be held to
guilty knowledge of the falsity of his
statements simply because it is later
determined they were false or some
reasonable person would know they were

false. See, United States v. Benjamin,

: 328 F.2d 854 (1964).

10

Even this is not all. One must
factor into any meaningful evaluation of
the representations made by Ellington
that some sales “puffing” is always
permitted in business transactions,
particularly when the people deal at
arms length -- the situation here.
Indeed, there is surely a difference

g between mere “puffing” and the making of
"representations that can be sufficiently
“regarded as having been made in
_ furtherance of a scheme to defraud.
“ "Puffing," of course, cannot properly be
regarded as anything other than the

;
expression of an opinion, Scott v. United

-

States, 263 F.2d 398, 402 (5th Cir.
1959), and is hardly the type of
assertions of which frauds are made,

See comment, Mail Fraud - Fraudulent

_Misrepresentations Must Be Distinguished

From "Puffing" Or Sellers Talk _ In

P ll

i

:
;
4
x
5
4

'
®

Offenses under 18 U.S.C. §1341, 22 S.

Car. L. BR. 434 (1970).

The upshot of this point is that

‘since any exaggerated sales talk, or

‘pitch, on the basis of which Ellington

sold himself to potential clients was

not sufficient to deceive anybody with a

‘reasonable amount of business sense, it

“can hardly be viewed as sufficient to

-carry the day for the Government on any
element of the charged offense. -Indeed,

the absence here of any proof that the

loan procedure employed by the

petitioner had no potential for success
makes it clear that to designate the
effort itself a complete sham makes no
sense at all.

A. The evidence failed to

establish the existence of a

scheme or artifice to defraud

by means of false or

12

fraudulent pretenses and the

like,

Distilled, what is here being

‘contended (and clearly this point has

ybeen sorely missed by the jury and the

‘framers of the indictment in this case)

m

‘is that the making of false statements
“standing alone is insufficient to

4

‘establish, either, a mail fraud or wire
‘fraud violation. What is required, which
mr was not shown here, is proof of a
‘recognizable scheme that was formed with
‘the specific intent to defraud and the
use of the mails in furtherance thereof.
A fair description of the scheme to
defraud, charged in the indictment, is
that Ellington and certain financial
brokers to whom he variously referred
clients, or discussed with clients, as
being capable of funding their individual

and separate financial projects were

13

actually incapable of doing so. And,

they were in fact only interested in
bilking people out of their application
fees. Further, the charge was made that
Ellington's representations as to his
asserted proven ability to generate these
loans were as wilfully false as was his
representations as to the ability of
those to whom the loan applications and
other financial papers were ultimately
submitted to finance any of the projects.
(See Tr. 1019-1022).

B. The evidence failed to

establish that the mails and

the wires were used ir

furtherance of a scheme to

defraud.

When the question as to _ whether
there was sufficient evidence to support
a finding that the mail or the wires were

resorted to in furtherance of a

14

fraudulent scheme, the answer hardly

seems ciear enough. Simply put, we also
contend there is a patent lack of any
causal connection between the use of the
mails and the effectuation of any scheme.
In making this argument we are persuaded
that the essential elements of mail fraud
and wire fraud are almost the _ same,

United States v. Lemire, 720 F.2d 1327

m.¢. Cir. 1983), which makes’- the
arguments made herein applicable to all

counts.

ARGUMENT NO, II

The Intent To Defraud

Instruction In This Mail And

Wire Fraud Prosecution Was

Constitutionally Insufficient

To Properly Place Before The

Jury The Good Faith Defense

Raised By The Accused.

A critical aspect of the defense

con ts

made to these charges was that the
accused acted at all times in good faith.
The Court indeed recognized that "good
faith" was a complete defense to the
charges made in the indictment (Tr. 866)

-- as it surely is. See Durland v.

United States, 161 U.S. 306 (1896).

Indeed, although expressly refusing to
give the jury the good faith instruction
submitted by the defense (Tr. 886), the
trial court openly conceded "[T]here is
enough evidence in the record to allow"
the defense to “argue good faith" (ibid).
However, as the Court saw it, the
argument had to be made under’ the
specific intent element of the charges
made (ibid). All this we contend was
pure error.

Our contentions in this regard finds

formidable support in United States v.

Goss, 650 F.2d 1336 (5th Cir. 1984),

16

which is analogous to the case here. In
Goss, as in this case, the Court did
instruct the jury “that a finding of a
specific intent to defraud is required
for conviction" of mail fraud (id., at
1345). What makes Goss so compelling is
that it specifically rejected the
position openly expressed by our trial
Judge as the reason why the good faith
instruction should not be given. Here we
refer to Judge Rice's expressed view,
which was an adoption of the
prosecutor's argument, that "the issue
was covered under the specific intent,
the wilfulness aspect of the instruction"
(Tr. 883). As put by the Court, while
"[glood faith is a defense ... it, in
effect, casts reasonable doubt upon
essential elements" of the charges, and
for that reason “it raises evidence to

the level of an element" (ibid).

17

The bottom line, of course, is that
the Court refused to give a good faith
instruction because he was convinced it
was unnecessary (id., 886).

In our view, a complete confutation
of the trial court's position is provided
by the following express holding in Goss:

Charging the jury that a
finding of specific intent to

defraud is required for
conviction, while it may
generally constitute the

negative instruction, i ae
that, if the defendants acted
in good faith, they could not
have had the specific intent
to defraud required for
conviction, does not direct
the jury's attention to the
defense of good faith with
sufficient specificity to
avoid reversible error.

Id., at 1345. Accord, Steiger v. United

States, 373 F.2d 133 (10th Cir. 1967);

Coleman v. United States, 167 F.2d 837 .

(Sth Cir. 1948), and Hawley v. United

States, 133 F.2d 966 (10th Cir. 1946).

18

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$

sd a des ie he ta Se os eee ie ai ai a ea
SE lye Shia lb No A sli aa Sets REIT Sit ERE TRAN eC

Since the trial court's attention

was specifically directed to the "good
faith" issue in this case, the Court's
obligation to give the instruction seems
clear enough. Stated another way, the
trial court under the facts here must
truly be deemed to have committed
reversible error by refusing to charge
the jury on the issue of good faith.

Goss, at 1344. Also see United States v.

Sherer, 653 F.2d 334 (8th Cir. 1981).
(Good faith is a complete defense to the
charge of mail fraud and a defendant is
entitled to such charge if there is
evidence to support the theory.)

The failure of the Court to give the

good faith charge is magnified by the

idea that had it been given the Court

would perforce have been required to

emphasize that the burden was on the

Government to prove beyond a reasonable

doubt the lack of good faith. Or, stated
another way, the Government would have
been charged wich disproving good faith.

See, United States v. Bronston, 658 F.2d

920 (2d Cir. 1981), where the Court
recognized that a basic ingredient of the
"good faith" defense is that the jury
should be instructed, not only that good
faith is a complete defense but "that the
burden was on the Government to prove
lack of good faith beyond a reasonable
doubt" (658 F.2d, at 930).

The cogency of petitioner's
arguments made above as to the prejudice
by which he was victimized, in the wake
of the Court's failure to specifically
instruct on good faith defense, is
further aggravated by still other
circumstances. Here reference is being
made to the Court's apparent thesis that

counsel having been licensed by him "to

argue" good faith "to a fair-thee-well"
(Tr. 886), somehow eliminated any need
for an instruction to which he _ was
entitled, and which trial counsel
expressly viewed as being absolutely
essential to the defense (Tr. 916-918).
For our part, it should go without
saying (since it is beyond dispute) that
it is always possible and proper for an
accused in closing arguments to
structure his analysis of the evidence in
such a way that those ’' instructions
favorable to him will be emphasized. It
is also beyond dispute that any argument
made to the jury on a legal issue
unsupported by an instruction to which
the defendant is entitled "...constitutes
an aggravation rather than a mitigation
of the harmful effects of the court's

refusal to instruct." United States v.

21

Phillips, 217 F.2d 435, 440 (7th Cir.

1954).

Stated another way, when viewed from
the standpoint of this petitioner, the
Court's failure to instruct the jury on
good faith also deprived him of the right
to have the imprimatur of the court put
upon his theory of the case. The point
here being, just as the indictment
summarized, in a sense, the factual
predicates upon which the prosecution
relies to establish guilt, the
defendant's theory of the case
instruction, in this instance the good
faith defense, rightly would have
directed the jury's attention to the
specific facts and issues upon which the
defense was based.

Given the further fact that
Ellington was also entitled absolutely to

have the jurv consider his good faith

22

theory of defense that found support in

the law and the evidence, Blane, 375
F.2d, at 252, then it surely follows that
the court's disinclination to do so had
the unavoidable effect of diluting the
petitioner's ability to prevail on the

basis of his defense. See, Strauss v.

United States, 376 F.2d 416, 419 (5th

Cir. 1967).

ARGUMENT NO. III

In A Mail And Wire Fraud

Prosecution The Given

Instruction Must Make It Clear

That The Existence Of A Scheme

To Defraud Must Be Established

Apart From Any False _ Or

Fraudulent Representations.

The term "scheme or artifice to
defraud," although originally coined by
Congress, was not defined by’ them.

Indeed, this point was specifically made

23

in Weiss v. United States, 122 F.2d 675,

at 681 (5th Cir. 1941) and in United

States v. Reid, 533 F.2d 1255, 1264 (D.C.

Cir. 1976). It is this failure that has
allowed the government to conjure up
expansive interpretations, such as_ we
have here. In this instance the effort
made is to force even a routine business
transaction under the mail and wire fraud
statutes, when if any crime at all was
involved, it should be handled on the
local level.

Still, and this case really makes
our point, a "scheme to defraud"
certainly must entail something more than
proof that a number of people spent, or
loss, money in an effort to benefit
themselves through business deals with
the same individual. While it is true
that a certain amount of trust was

certainly involved in each of these

24

transactions. and it may very well be
that an argument can be made that it was
breached, it is surely the law that not
every breach of trust results in a

criminal fraud. See, United States v.

George, 477 F.2d 508 (7th Cir. 1973).

Also see Epstein v. United States, 174

F.2d 754, 766 (6th Cir. 1949).

All this being so, the
criminalization of what happened here
under the fraud statutes involved hardly

seems defensible. See Hurson, Limiting

The Federal Mail Statutes - A Legislative

Approach, 20 Am. Crim. L. Rev. 423

(1983).

When what has been said above is
focused on the Court's charge as to the
requirements of a “scheme or artifice to
defraud," it must surely be that the
Court's charge failed in its purpose.

Here we centralize the following segments

25

sn eh Ce aaa tates I

of the charge given by the Court:

The words "scheme" and

"artifice", as used in the

mail and wire fraud statutes

include any plan or course of

action intended to deceive

others, and to obtain, by

false or fraudulent pretenses,

representations, or promises,

a substantive benefit, such as

money or property, from the

party so deceived,
(tr. 20%9.) In our view, the above
instruction failed to inform the jury of
what clearly appears to be the case --
that is, that a “scheme or artifice" must
clearly be identifiable and exist apart
from the acts supposedly committed in
furtherance thereof. Stated another way,
it is surely not the law that the mailing
of a letter can become an act done in
furtherance of a scheme if it develops
that any one or more of the statements
made in the course of an entire

relationship turns out to be false. If

this is a valid position then the

26

business practices utilized by our

petitioner cannot logically be regarded
as a scheme within the purview of the
statutory proscriptions here involved.
This is so for the further reason
that the various representations claimed
to be false and fraudulent were not
reasonably calculated to deceive even
people of ordinary prudence and

comprehension, Blachly v. United States,

380 F.2d 665, 671 (5th Cir. 1967).
The point here being contended for

was well made in United States v. Regent

Office Suppiy Co., 421 F.2d 1174 (2d Cir.

1970). Also see Horman v. United States,

116 F.2d 350 (6th Cir. 1902) and Harrison

v. United States, 200 F.2d 662 (6th Cir.

1912).
So postured, since "scheme to
defraud" within the contemplation of 18

U.S.C. §1341, can at least be likened to

27

a racketeering "enterprise" which has
been defined as an amoeba-like

infra-structure, United States Vv.

Elliott, 571 F.2d 880, 898 (5th Cir.
1978), it follows that the given
instructions on this element failed in
its intended purpose. The purpose being
referred to, of course, would have surely
included defining what at best can be
said to be a concept that is difficult to
define. Here we refer to the entity or
"scheme to defraud," which was said to be
furthered by the use of the mails and

wire. Compare United State v. Condolon,

600 F.2d 7 (4th Cir. 1979) which really
makes our point.

CONCLUSION

If what the accused did in this case
can be criminalized on the basis of the
mail and wire fraud statutes, then it has

to be that any business transaction in

28

which extravagant, or even the usual,
sales pitches are given can be deemed a
federal crime if for any reason it
develops that the party making’ the
representations cannot deliver on what he
thought were reasonable assurances.
Stated another way, can the routine sort
of puffing that goes on in business
transactions be converted by the mere use
of the mails, or the wires, into a
federal criminal offense.

Surely Congress never intended that
the Government should become involved to
the extent here shown in routine business
transactions. If what this petitioner
Gid was a crime, then his fate should
have been dealt with by the State of Ohio

in its courts rather than by the U.S.

29

Attorney in a Federal Court, where the
law has to be strained as much as it was
here,

Respectfully submitted,

JAMES R. WILLIS, ESQ.
Attorney for Petitioner
Suite 619, Bond Court Bldg
1300 East Ninth Street
(216) 523-1100

CERTIFICATE OF SERVICE

I hereby certify that a copy of the
foregoing Petition For Writ of Certiorari
was mailed to Charles Fried, Solicitor
General, United States Justice
Department, Washington, D.C. 20530 and to
Ann Marie Tracey, Assistant U.S.
Attorney, U.S. Post Office and Courthouse
Bldg., Cincinnati, Ohio 45202, this

day of November, 1985.

JAMES R. WILLIS, ESQ.
Attorney for Petitioner

30

APPENODI X

No. 84-3696
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

ON APPEAL
FROM THE
UNITED STATES
DISTRICT
COURT FOR THE
SOUTHERN
DISTRICT OF
OHIO

CHARLES LEONARD ELLINGTON
Defendant-Appellant,

BEFORE: JONES, Circuit Judge, EDWARDS,
Senior Circuit Judge; and SILER,
District Judge.*

PEFR CURIAM. Appellant, Charles
Ellington, appeals his conviction of
thirteen counts of mail fraud in
violation of 18 U.S.C. §1341, and one
count of wire fraud in violation of 18

U.S.C. §1343. Appellant argues that the

evidence was insufficient to support the

* The Honorable Eugene E. Siler, Jr.,
Chief Judge, United States District Court
for the Eastern District of Kentucky,
sitting by designation.

APPENDIX "A"
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conviction, and that the instructions
failed to put the theory of the defense
before the jury. We affirm the judgment
of the district court.

-.

Appellant first contends that the
evidence was insufficient to support the
conviction because there was no evidence
that he acted with intent to deceive or
defraud. Viewing the evidence in the
light most favorable tc the government,

United States v. Stone, 748 F.2d 361, 363

(6th Cir. 1984), it is clear that there
was sufficient evidence upon which to
base the conviction. The evidence showed
that appellant went into business for
himself and formed the company Unlimited
Financing. He represented to clients
that he had the ability to ok*ain large
loans through the use of § insurance

guarantees and that he represented or had

A2

special access to lenders who could fund
large business ventures or construction
projects. He also advised prospective
clients that he had successfully closed
numerous loans in the past. He assured
them that, based on his track record and
his analysis of their projects, he would
be able to obtain funding for’ them.
Appellant admitted at trial, however,
that he had never successfully closed a
loan using insurance guarantees.
Appellant contends that the evidence
is not inconsistent with his defense that
he acted in good faith. However, even if
Ellington honestly believed in the
ultimate success of his venture, that
belief is not a defense to mail fraud.

United States v. Stull, 743 F.2d 439, 446

[ean Gen. 276s), Cert. denied, 105 S. Ct.

1779 (1985). In Stull the Court upheld

mail fraud convictions where

A3

misrepresentations included both promises
to fund within short periods of time
(30-45 days) and promises that 96% of the
loan requests were funded, but where no
loans were funded. Id. at 443. "'([Njo
matter how firmly the defendant may
believe in the plan, his belief will not
justify baseless, false, oor reckless
representations or promises.'" 743 F.2d

at 446 (quoting Sparrow v. United States,

402 F.2d 826, 828 (10th Cir. 1968). in
sum, there is ample evidence from which
the jury could find that Ellington
intentionally devised a scheme to defraud
his clients and that he used the mails
and, in one instance, the wires to obtain
funds from his clients.
II
Appellant next contends that the

instruction regarding intent was

insufficient to place the good faith

A4

=

defense of the accused before the jury.
Appellant had requested the following
instruction:

If the evidence in the case
leaves you with a reasonable
doubt as to whether the
Defendant in good faith
believed his statements to be
true at the time he made them,
then you must find the
Defendant not guilty.

The district judge disallowed the
instruction because he believed the
defense related directly to the element
of intent and that the instruction that
the government must prove intent beyond a
reasonable doubt was adequate to meet

defendant's concern,

Appellant relies on United States v.

Goss, 650 F.2d 1336, 1345 (5th Cir.
1981), to argue that the failure to give
the good faith instruction was error.
The government correctly notes~ that
following the trial in this matter the

Sixth Circuit addressed this question in

AS

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United Staets v. McGuire, 744 F.2d 1197,

1200-01 (6th Cir. 1984), cert. denied,

105 S. Ct. 1866 (1985), and rejected the
position set forth by the Fifth Circuit
in Goss. This Court held in McGuire that
although the better practice is to give a
good faith instruction, the failure to do
so was harmless given the fact that the
instructions with regard to _ specific
indent expressly informed the jury of the
defendant's theory of the case. and
properly placed the burden of proof of
intent on the government. Id. at
1201-02. The instructions in the instant
case advised the jury that the
defendant's actions must be knowingly and

intentionally done, without mistake,

accident or an innocent reason and with a
specific intent and bad purpose to
violate the law. The court also

instructed the jury that §$ fraudulent

A6

statements, if known to be untrue or made
with reckless indifference to the truth,
must be made with intent to deceive. The
court further instructed the jury that it
must find that the defendant acted with
intent to defraud, that is, “to act
knowingly and with the specific intent to
deceive, ordinarily for the purpose of
either causing some financial loss to
another or bringing about some financial
gain to oneself." The instructions did
not, however, expressly inform the jury
of the defendant's theory.

Nevertheless, we believe the error
was harmless given the strength of the
proof in this case regarding appellant's
intent to deceive. Appellant only argued
that his statements regarding his
dealings with other brokers and his

belief that he could obtain funding were

in good faith. He admitted at trial that

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he had never been successful in closing a
loan using insurance guarantees and that
the only lender he represented was in
reality an agent of lenders.
Consequently, the statements made
regarding his past successes and his
relationships with lenders were blatantly
untrue and could not have been made in
geod faith. These representations were
made to induce payment of a fee and
constitute a sufficient basis by
themselves for sustaining the mail and
wire fraud convictions. Proof of any one
or more of the fraudulent
misrepresentations charged, made pursuant.
to the scheme to defraud, is adequate for
conviction of violating 18 U.S.C. 1341.

United States v. Toney, 598 F.2d 1349

(Sth Cir. cert. denied, 444 U.S. 1033

(1979); Usited States v. Halbert, 640

F.2d 1000 (9th Cir. 1981). In sum, the

A8&

court should have civen the instruction,
but the failure to do so without the
benefit of Mcguire was harmless error.

Appellant also claims that’ the
instructions failed to make it clear to
the jury that the existence of a scheme
to defraud must exist apart from the acts
allegedly committed in furtherance of the
alleged scheme. We decline to address
this issue because of appellant's failure
to preserve the issue by objecting to the
instruction,

Accordingiy, the judgment of the

district court is AFFIRMED,

ISSUED AS MANDATE: September 25, 1985

COSTS: None

AY

RELEVANT STATUTORY PROVISIONS

§1341. Frauds and swindles

Whoever, having devised or intending
to devise any scheme or artifice to
defraud, oor for obtain _ng money or
property by means of false or fraudulent
pretenses, representations, or promises,
or to sell, dispose of, loan, exchange,
alter, give away, distribute, supply or
furnish or procure for unlawful use any
counterfeit or spurious coin, obligation,
security, or other article, ... for mail
matter, any matter or thing whatever to
be sent or delivered by the Postal
Service, or takes or receives therefrom,
any such matter or thing, or knowingly
causes to be delivered by mail according
to the direction thereon, or at the place
at which it is directed to be delivered

by the person to whom it is addressed,

APPENDIX "'B"
A10

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any such matter or thing, shall be fined
not more than $1,000 or imprisoned not
more than five years, or both.

* * *
§1343. Fraud by wire, radio, or

television.

Whoever, having devised or intending
to devise any scheme or artifice to
defraud, oor for obtaining money or
property by means of false or fraudulent
pretenses, representations, or promises,
transmits or causes to be transmitted by
means of wire, radio, or television
communication in interstate or foreign
commerce, any writings, signs, signals,
pictures, or sounds for the purpose of
executing such scheme or artifice, shall
be fined not more than $1,000 or
imprisoned not more than five years, or

both.

All

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1048%3A1. Public record. Not legal advice.